What Makes Starbucks Different From Others (Case Study Sample)
- In the beginning, how was Starbucks different from other options for coffee drinkers in the United States? (in other words, what was Starbucks initial competitive advantage?)
- Starbucks made significant changes to achieve its rapid growth (2006-2009); What did Starbucks gain and give up as a result of these changes?
- When Schultz returned to Starbucks as CEO in 2008 what had changed in the competitive environment? What caused the changes?
- Starbuck under Schultz the second time made changes to respond to the new market conditions he found; were his changes effective or not and why?
- Was the introduction of VIA in 2009 a good idea for Starbucks given market conditions at the time? Explain your answer.
Please refer at least one point on slides used in class for each questionsource..
A Case Study about Starbucks
In the preliminary stages of the establishment of Starbucks Corporation, it strived to offer the world’s finest products and services (Garthwaite et al. 3). The company aimed at offering high-quality coffee and creation of an environment that resembled home to make its customers feel more comfortable while out. Starbuck roasted its coffee in a modern facility that gave their coffee a unique taste absent in other typical coffee restaurants in the United States. After roasting process, coffee would be ferried to the company stores and grounded prior to brewing to ensure it retained its flavor, freshness, and aroma, hence maintaining the maximum quality (Garthwaite et al. 3). The company used Marcozzo machines to prepare coffee with exceptional taste. Most of the coffee restaurants were installed with cozy fireplaces, wood floors, and overstuffed chairs to create a home-like feeling to allow the customers to relax and feel more comfortable. Starbucks also included the quasi-Italian lingo in their menu, where the sizes and the names of drinks were clearly indicated (Garthwaite et al. 3). Consequently, such menus were highly attractive to the customers compared to those of other restaurants all over the United States. Moreover, the management carefully selected the locations to set up coffee points across the country. For instance, regions with large numbers of highly professional and wealthy individuals were mainly targeted. Briefly, the company aimed at offering lifestyle products to make its clients feel the corporation was richer, cooler and classy than other coffee restaurants (Garthwaite et al. 3). As a result, customers were willing to pay higher for coffee offered in Starbucks and not from other coffee stalls. As indicated in chapter 1, a company that uses a strategy that aims at offering products and services of high qualities competes favorably in the market as evidenced by Starbucks.
In the duration of five years, Starbucks had established more than 5000 coffee restaurants. However, between 2006 and 2009, the company formulated a plan to expand its store locations and by 2007, it operated approximately 15,000 stores (Reuters). In the same year, Starbucks announced its plan to open 40,000 more stores all over the world with half of that number being opened in the United States alone (Reuters). To achieve such a goal, it was fundamental to make various operational changes. One of the changes made was the replacement of the La Marzocco espresso machines with some more modern ones referred to as Verismo machines (Starbucks Corporate). Subsequently, the process of hiring and training baristas was massively simplified because the new machines formed a uniform product that did not require a higher level of professionalism and training. Also, the new machine reduced the time required to pull an espresso shot to 36 seconds from 60 seconds. Nevertheless, the height of the grinding apparatus of the Verismo machine blocked customers from clearly viewing baristas and the machine’s simplicity eliminated the prior interaction between customers and baristas. Some of the loyal customers of Starbucks indicated that the Verismo machines did not produce espresso of the quality witnessed during the time of the old machines (Garthwaite et al. 4). Another change introduced was the grounding site. The company contended that the preparation of one pot of coffee was time-consuming and could not meet the stipulated 3 minutes per service. As a result, the company decided to eliminate the process of...
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